State Street Corp., the giant asset manager based in Boston, is laying off about 1,500 employees as it navigates difficult market conditions.
The firm said in an earnings report Friday that the six percent reduction to its workforce will be focused on “high-cost locations” as it reaps the benefit of automation. State Street is limiting regional operating differences and paring “manual, bespoke activities,” according to the statement.
State Street’s assets under management dropped during a turbulent fourth quarter for markets to $2.5 trillion, down 10.6 percent from the end of September. The firm has started a new expense savings program to help cope with industry and market challenges that have hurt other asset managers as well.
“While we have made progress on our technology transformation, much remains to be done and we are not satisfied with our recent performance,” Ronald O'Hanley, State Street’s president and chief executive officer, said in the statement. “Structural costs are still too high and our automation efforts have not moved fast enough.”
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State Street follows recent moves by BlackRock, the world's largest asset manager, and AQR Capital Management to cut staff. BlackRock announced in an internal memo earlier this month that it would reduce staff by three percent, or about 500 employees globally, due to growing market uncertainty and evolving investor preferences in an increasingly complex operating environment.
AQR, the quantitative investment firm led by Cliff Asness, recently trimmed a small percentage of its 1,025 employees, an AQR spokesperson told Institutional Investor on January 9. The quant firm struggled with disappointing performance last year.